How the Federal Reserve proceeds with interest rates will be the question commanding investor attention this month ahead of the March policy meeting. Next week, the first full trading week of March, macroeconomic concerns will take center stage for investors. Fed Chair Jerome Powell is set to give his semiannual monetary policy update to the House of Representatives on Wednesday, and the Senate on Thursday, testimonies that will be dissected by traders for any insight into when lower rates are coming. Rate cut expectations have already come down from where they were as the year began. Now they’re expected to start later in the year and Wall Street forecasts fewer of them. At the January Fed policy meeting, Powell shot down the probability that rates would come down in March, insisting that the Fed will proceed carefully as it deliberates when to take its foot off the brake. Currently, markets are pricing in the likelihood of a quarter percentage point cut first coming in June, instead of March or May, as implied by trading in 30-day interest rate futures, according to the CME FedWatch Tool . Next week, the Fed chief is largely anticipated to stick to the same talking points in testifying before Congress. But his comments will take on added significance after last month’s hotter consumer and producer price reports reminded investors that the last mile to the Fed’s 2% inflation target won’t be smooth. Powell will likely try to address, and assuage, those concerns. “The emphasis has really shifted back to inflation,” said Shannon Saccocia, chief investment officer at NB Private Wealth. Any remarks made by Powell that are in variance with what he has previously said have the potential to be a market moving event. On the calendar, the Capitol Hill appearances come ahead of the February jobs report next Friday, and are also the last scheduled appearances by the Fed chair before the next Fed meeting on March 19-20. .IXIC 5Y mountain Nasdaq Composite Still, outside of…
2024-03-01 15:14:00
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